Inducing Breach of Contract in Trade Disputes: Development of the Law in England and Canada 1 Innis Christie * (A) Introduction [I]f a person without lawful justification knowingly and intentionally procures the breach by a party to a contract which is valid and enforceable and thereby causes damage to another party to the contract, the person who has induced the breach commits an actionable wrong. In the course of his judgment in the Posluns case Gale J., now Chief Justice of the High Court of Ontario, thus defined the tort of inducing breach of contract.2 The Posluns case was an action by a stockbroker against the Toronto Stock Exchange, but it is in the context of trade disputes, especially in cases of picketing, that the tort of inducing breach of contract is significant in Canada. In the confused fact situations arising out of trade disputes Canadian courts have not always been as careful as was Gale, J. to identify each of the elements of the tort, with the result, for example, that liability has been imposed where it was not shown that there was any contract actually breached. In English trade dispute law, on the other hand, inducing breach of contract is treated as a clearly defined tort consisting of five elements. There must be an act of inducement, which usually takes the form of persuasion of one of the parties to a contract, knowledge of the contract in question, an intention to cause breach of the con- tract and to injure the plaintiff thereby, and special damage caused by the breach. There must also be an absence of what will be regarded in law as justification. 3 Other considerations enter where what is alleged is indirect inducement of breach of contract by an act illegal in itself, but both direct and indirect inducing breach of contract are bases of tortious liability that, in English law, are carefully circum- scribed. Assistant Professor of Law, Queen's University. 1 This article is taken, substantially unchanged, from chapter IV of the writer's book, The Liability of Strikers in The Law of Tort; A Comparative Study of Judicial Development of the Law in England and Canada, to be published by the Queen's Industrial Relations Centre. 2 Poslun v. Toronto Stock Exchange and Gardiner (1965), 46 D.L.R. (2d) 210, at p. 261. 3 See Rookes v. Barnard, [1964] A.C. 1129 (H.L.), per Lord Devlin at p. 1212. McGILL LAW JOURNAL [Vol. 13 Not only has liability been imposed in Canada where English law would not recognize -that the tort of inducing breach had been com- mitted but, there are other reasons, sounder at least in judicial logic, why the tort has a more important place in Canadian law of industrial conflict. For one thing, there is no statute, like the English Trade Unions & Trade Disputes Act, 1906,4 that prevents "inducing breach" being based on breach of employment contracts. Almost as important is the fact that in recent cases judicial notice has been taken of 'the rule" against crossing a picket line. Canadian judges now take it as established fact that the ethic of trade unionism is such that unionists will, as a predictable consequence, refuse to "cross another man's picket line". Therefore, it has been held,l the picket may be said to have effectively caused any resulting breaches of contract. The English concept of liability for indirect inducement, which is relevant in such a situation, does not seem always to have been clearly understood. Moreover the concept of justification has not been developed to take into account the protection of union interests under a collective bargaining agreement, although Canadian col- lective bargaining legislation demonstrates irrefutably the legal legitimacy of those interests. There is, of course, no longer any reason why the law in this country should not depart from that of England where the facts of Canadian life call for it. But the departure should be conscious, to meet the needs of a different environment, -and not the result of reliance on a complex and misunderstood head of tortious liability in which substantial changes are made for reasons that can only be guessed at. (B) The Law In England The law of inducing breach of contract in England was formed mainly in pre-twentieth century cases that can, with some distortion, be called "labour" cases. In 1906, by Act of Parliament, the "in- ducer" in such cases was relieved of liability where the contract was one of employment, as it had been in the principal cases up to that time. This political intervention meant that thereafter, the tort was the subject of judicial consideration in cases that, for the most part, did not involve industrial conflict. There were, naturally enough, a considerable number of "labour" cases concerning the scope of ap- 46 Edw. 7, c. 47. 5Smith Brothers Construction Co. Ltd. v. Jones, [1955] 4 D.L.R. 255 (Ont. H.C.); Hersees of Woodstock v. Goldstein (1963), 38 D.L.R. (2d) 449 (Ont. C.A.); and see infra, footnotes 288-239 and accompanying text. No.lI] INDUCING BREACH OF CONTRACT plication of the Act of 1906, and the decisions on this point may well be of more importance in the law of England than the cases on "inducing breach" itself. In what follows, the development of the tort of inducing breach of contract in the 19th century is considered first, followed by a consideration of section 3 of the Trade Unions Trade Disputes Act, 1906 (U.K.) and its effect on liability for in- ducing breaches of contracts of employment. The next two heads deal with twentieth century refinements relating to the questions of what consititutes "inducing" and when there may be said to be "justification". The concluding part of this section is an examination of the complex basis of liability for indirect inducement of breach of contract that has been developed in two of the leading English labour cases of recent years.6 It may be that liability for such indirect inducement is really something quite different from the sui generis tort of inducing breach. Whether that is so or not, it is an area of the law that deserves, and demands, analysis. Development of the tort of inducing breach of contract in the 19 century In the early common law a master who, by violence to his servant, was deprived of the man's services had a right of action against the wrongdoer. The Statute of Labourers of 1349,7 and the Statute of Labourers, 1350,8 gave a master -an action for the enticement of his servants out of his service, even where there was no violence0 The modern, and such restricted, 0 action per quod servitium amisit, which is based on interference with the status of the servant in the master servant relationship," has evolved from these roots. 2 What- ever the derivation of these rights of action it was clear in the 19th century that there was a right of 'action for interference with con- tractual relations, but it was limited to interference with contracts of service. 6 J. T. Stratford and Son Ltd. v. Lindley, [1965] A.C. 269 (H.L.) ; Thomson v. Deakin, [1952] Ch. 646 (C.A.). 7 23 Edw. III. 825 Edw. III. 9 See Sayre, "Inducing Breach of Contract" (1923) 36 Harv. L. Rev. 663. 10I.R.C. V. Hambrook, [1956] 2 Q.B. 641. "1A.G. for New South Wales v. Perpetual Trustee Co. Ltd., [1955] A.C. 457, at p. 483. 12 So, too, did the action for wrongful retainer, which was based on inter- ference with the contract of service. Blake v. Lanyon (1795), 6 T.R. 221; 101 E.R. 521. See Jones, "Per Quod Servitiu. Amisit", (1958) 74 L.Q.R. 39. McGILL LAW JOURNAL [Vol. 13 From this material, in Lumley v. Gye 13 in 1853, the Court of King's Bench created, a new cause of action. Miss Johanna Wagner, an operatic performer of unique talents, had contracted with the plaintiff to sing exclusively in his production. The defendant per- suaded her to perform for him, in breach of her contract with the plaintiff. It was argued for the defendant that, because Miss Wagner's was not a contract of service, but a contract to perform services, no action would lie for inducing her to act in breach of it. The court was, however, not to be influenced by the novelty of their argument. Said Crompton J., The nature of the injury and of the damage being the same, and the supposed right of action being in strict analogy to the ordinary case of master and servant, I see no reason for confining the case to services or engagements under contracts for services of any particular description; and I think that the remedy, in the absence of any legal reason to the contrary, may well apply to all cases where there is an unlawful and malicious enticing away of any person employed to give his personal labour or service for a given time.. 14 Counsel had also argued on the broad ground that a wrong in- tentionally done to another must always give him a right of action. Crompton J. did go on to say that, while he based his decision on the narrower ground of analogy to a master's right of action where he has been deprived of his servant's services, he did not wish to be taken as saying that the wider argument advanced by counsel was not tenable. Nor was he confining the right of action for "malicious" inducement of breach of contract to cases involving contracts for personal services.